v2.3.0.9
Loans
3 Months Ended
Sep. 30, 2011
Receivables [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
Note 3 – Loans
 
Major classifications of loans were as follows:
 
   
September 30,
   
June 30,
 
   
2011
   
2011
 
Commercial
  $ 19,034     $ 19,297  
Commercial real estate:
               
Construction
    2,379       1,057  
Other
    100,361       97,403  
1 – 4 Family residential real estate:
               
Owner occupied
    33,251       34,488  
Non-owner occupied
    18,505       19,098  
Construction
    139       597  
Consumer
    6,498       5,874  
Subtotal
    180,167       177,814  
Less: Net deferred loan fees
    (266 )     (263 )
Allowance for loan losses
    (2,087 )     (2,101 )
Net Loans
  $ 177,814     $ 175,450  
 
The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2011:
 
         
Commercial
   
Residential
             
         
Real
   
Real
             
   
Commercial
   
Estate
   
Estate
   
Consumer
   
Total
 
                               
Allowance for loan losses:
                             
Beginning balance
  $ 179     $ 882     $ 947     $ 93     $ 2,101  
Provision for loan losses
    (82 )     172       (33 )     35       92  
Loans charged-off
                (69 )     (50 )     (119 )
Recoveries
                      13       13  
                                         
Total ending allowance balance
  $ 97     $ 1,054     $ 845     $ 91     $ 2,087  
 
A summary of activity in the allowance for loan losses for the three months ended September 30, 2010, was as follows:
 
Beginning of period
  $ 2,276  
Provision
    102  
Charge-offs
    (41 )
Recoveries
    20  
Total ending allowance balance
  $ 2,357  
 
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2011. Included in the recorded investment in loans is $(266) of net deferred loan fess and $459 of accrued interest receivable.
               
1-4 Family
             
         
Commercial
   
Residential
             
         
Real
   
Real
             
   
Commercial
   
Estate
   
Estate
   
Consumer
   
Total
 
Allowance for loan losses:
                             
Ending allowance balance attributable to loans:
                             
Individually evaluated for impairment
  $ 10     $ 107     $ 249     $     $ 366  
Collectively evaluated for impairment
    87       947       596       91       1,721  
                                         
Total ending allowance balance
  $ 97     $ 1,054     $ 845     $ 91     $ 2,087  
                                         
Recorded investment in loans:
                                       
Loans individually evaluated for impairment
  $ 77     $ 1,395     $ 1,320     $     $ 2,792  
Loans collectively evaluated for impairment
    19,010       101,359       50,711       6,488       177,568  
                                         
Total ending loans balance
  $ 19,087     $ 102,754     $ 52,031     $ 6,488     $ 180,360  
 
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2011. Included in the recorded investment in loans is $(263) of net deferred loan fees and $472 of accrued interest receivable.
 
               
1-4 Family
             
         
Commercial
   
Residential
             
         
Real
   
Real
             
   
Commercial
   
Estate
   
Estate
   
Consumer
   
Total
 
Allowance for loan losses:
                             
Ending allowance balance attributable to loans:
                             
Individually evaluated for impairment
  $ 13     $ 126     $ 293     $     $ 432  
Collectively evaluated for impairment
    166       756       654       93       1,669  
                                         
Total ending allowance balance
  $ 179     $ 882     $ 947     $ 93     $ 2,101  
                                         
Recorded investment in loans:
                                       
Loans individually evaluated for impairment
  $ 82     $ 1,405     $ 1,042     $     $ 2,529  
Loans collectively evaluated for impairment
    19,254       97,093       53,279       5,868       175,494  
                                         
Total ending loans balance
  $ 19,336     $ 98,498     $ 54,321     $ 5,868     $ 178,023  
 
The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the three months ended September 30, 2011:
   
Unpaid
         
Allowance for
   
Average
   
Interest
   
Cash Basis
 
   
Principal
   
Recorded
   
Loan Losses
   
Recorded
   
Income
   
Interest
 
   
Balance
   
Investment
   
Allocated
   
Investment
   
Recognized
   
Recognized
 
                                     
With no related allowance recorded:
                                   
Commercial
  $ 16     $ 16     $     $ 17     $     $  
Commercial real estate:
                                               
Other
    635       634             635       3       3  
1-4 Family residential real estate:
                                               
Owner occupied
    97       97             97       2       2  
Non-owner occupied
    64       65             43              
With an allowance recorded:
                                               
Commercial
    62       61       10       63              
Commercial real estate:
                                               
Other
    762       761       107       763       5       5  
1-4 Family residential real estate:
                                               
Owner occupied
    220       218       14       218       2       2  
Non-owner occupied
    940       940       235       871              
Total
  $ 2,796     $ 2,792     $ 366     $ 2,707     $ 12     $ 12  
 
The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2011 and for the three months ended September 30, 2010:
   
As of June 30, 2011
   
Three Months ended September 30, 2010
 
   
Unpaid
         
Allowance for
   
Average
   
Interest
   
Cash Basis
 
   
Principal
   
Recorded
   
Loan Losses
   
Recorded
   
Income
   
Interest
 
   
Balance
   
Investment
   
Allocated
   
Investment
   
Recognized
   
Recognized
 
                                     
With no related allowance recorded:
                                   
Commercial
  $ 18     $ 18     $     $ 23     $     $  
Commercial real estate:
                                               
Other
    413       412             493              
With an allowance recorded:
                                               
Commercial
    64       64       13       30              
Commercial real estate:
                                               
Other
    997       993       126       1,263       3       18  
1-4 Family residential real estate:
                                               
Owner occupied
    320       319       3       222       2        
Non-owner occupied
    724       723       290       775              
Total
  $ 2,536     $ 2,529     $ 432     $ 2,806     $ 5     $ 18  
 
The following table presents the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2011 and June 30, 2011:
   
September 30, 2011
   
June 30, 2011
 
          Loans Past Due          
Loans Past Due
 
          Over 90 Days          
Over 90 Days
 
   
 
   
Still
         
Still
 
   
Non-accrual
   
Accruing
   
Non-accrual
   
Accruing
 
Commercial
  $ 62     $     $ 64     $  
Commercial real estate:
                               
Other
    950             754        
1 – 4 Family residential:
                               
Owner occupied
    358             219        
Non-owner occupied
    649             723        
Consumer
                       
Total
  $ 2,019     $     $ 1,760     $  
 
Non-accrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.
 
The following table presents the aging of the recorded investment in past due loans as of September 30, 2011 by class of loans:
 
   
Days Past Due
                   
               
90 Days or
                   
     30 - 59      60 – 89    
Greater &
   
Total
   
Loans Not
       
   
Days
   
Days
   
Non-accrual
   
Past Due
   
Past Due
   
Total
 
Commercial
  $ 16     $     $ 37     $ 53     $ 19,034     $ 19,087  
Commercial real estate:
                                               
Construction
                            2,378       2,378  
Other
    112             651       763       99,613       100,376  
1-4 Family residential:
                                               
Owner occupied
                211       211       33,172       33,383  
Non-owner occupied
    26                   26       18,482       18,508  
Construction
                            140       140  
Consumer
    28                   28       6,460       6,488  
Total
  $ 182     $     $ 899     $ 1,081     $ 179,279     $ 180,360  
 
The above table of past due loans includes the recorded investment in non-accrual loans of $1,120 in the loans not past due category.
 
The following table presents the aging of the recorded investment in past due loans as of June 30, 2011 by class of loans:
 
   
Days Past Due
                   
                90 Days or                    
    30 - 59     60 - 89    
Greater &
   
Total
   
Loans Not
       
   
Days
   
Days
   
Non-accrual
   
Past Due
   
Past Due
   
Total
 
Commercial
  $     $ 1     $     $ 1     $ 19,335     $ 19,336  
Commercial real estate:
                                               
Construction
                            1,053       1,053  
Other
          242       412       654       96,791       97,445  
1-4 Family residential:
                                               
Owner occupied
          167       23       190       34,438       34,628  
Non-owner occupied
          44       175       219       18,877       19,096  
Construction
                            597       597  
Consumer
    26                   26       5,842       5,868  
Total
  $ 26     $ 454     $ 610     $ 1,090     $ 176,933     $ 178,023  
 
The above table of past due loans includes the recorded investment in non-accrual loans of $410 in the 60 – 89 days past due category and $740 in the loans not past due category.
 
Troubled Debt Restructurings:
The Corporation allocated $279 and $229 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2011 and June 30, 2011. As of September 30, 2011 and June 30, 2011, the Corporation had not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.
  
During the period ending September 30, 2011, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a permanent reduction of the recorded investment in the loan; or a temporary reduction in the payment amount to interest only.
 
Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from 12 months to 6.5 years. Modifications involving an extension of the maturity date were for a period of 6.5 years.
 
The following table presents loans by class modified as troubled debt restructurings that occurred during the period ending September 30, 2011:
 
         
Pre-Modification
   
Post-Modification
 
   
Number of
   
Outstanding Recorded
   
Outstanding Recorded
 
   
Loans
   
Investment
   
Investment
 
Troubled debt restructuring:
                 
1 – 4 Family residential:
                 
Non-owner occupied
    7     $ 534     $ 466  
                         
Total
    7     $ 534     $ 466  
 
The troubled debt restructurings described above increased the allowance for loan losses by $20 and resulted in charge offs of $63 during the period ending September 30, 2011.
 
Credit Quality Indicators:
The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes loans with a total outstanding loan relationship greater than $100 and non-homogeneous loans, such as commercial and commercial real estate loans. Management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt and affirm the risk ratings for the loans and leases in their respective portfolio on an annual basis. The Corporation uses the following definitions for risk ratings:
 
Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.
 
Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
 
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
 
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $100 or are included in groups of homogeneous loans. Based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans was as follows:
   
As of September 30, 2011
 
         
Special
               
Not
 
   
Pass
   
Mention
   
Substandard
   
Doubtful
   
Rated
 
Commercial
  $ 17,966     $ 775     $ 56     $ 77     $ 213  
Commercial real estate:
                                       
Construction
    2,199       179                    
Other
    89,028       7,220       2,218       1,395       515  
1-4 Family residential real estate:
                                       
Owner occupied
    4,755       370       101       315       27,842  
Non-owner occupied
    13,677       2,650       991       1,005       185  
Construction
                            140  
Consumer
                            6,488  
Total
  $ 127,625     $ 11,194     $ 3,366     $ 2,792     $ 35,383  
 
   
As of June 30, 2011
 
         
Special
               
Not
 
   
Pass
   
Mention
   
Substandard
   
Doubtful
   
Rated
 
Commercial
  $ 17,469     $ 743     $ 884     $ 82     $ 158  
Commercial real estate:
                                       
Construction
    868       76       109              
Other
    87,857       5,624       2,055       1,405       504  
1-4 Family residential real estate:
                                       
Owner occupied
    5,526       305       372       319       28,106  
Non-owner occupied
    14,549       1,976       1,657       723       191  
Construction
    28                         569  
Consumer
                            5,868  
Total
  $ 126,297     $ 8,724     $ 5,077     $ 2,529     $ 35,396